Dive Brief:
- Nearly every company in WorldatWork’s annual Salary Budget Survey (SBS) is planning a larger salary budget for 2018. Most increases are moderate, as they were in 2016, and account for annual raises, merit increases and cost of living adjustments. The survey polled companies in 16 countries.
- WorldatWork attributes the modest salary budget increases to volatility in the markets, uncertainty in the European Union and global political unrest.
- Countries with relatively large salary budget increases, such as Brazil, India, China and Russia, also have large rates of inflation that might call for budget adjustments, say WorldatWork officials.
Dive Insight:
Considering last year's numbers, the study is isn't all that surprising. A 2016 Willis Towers Watson survey showed that pay increases would be flat going into 2017. The WorldatWork study seems to confirm these results.
Many economists say wages have been stagnant for decades. Some point out that modest budget salary increases are a cause.
Even so, a poll of recent college graduates found their salary expectations to be quite high. The class of 2017 anticipates starting salaries of between $60,000 and $100,000, according to a study by Yello, a talent acquisition software provider.
These studies might force employers to think about how their salary budget increases are likely to affect recruitment and retention. Employers who set pay levels at just above inflation rates might lose graduates and skilled talent to the competition.
